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SBM Offshore N.V.: SBM OFFSHORE HALF-YEAR RESULTS 2014 Revenue up 6%; Outlook confirmed August 6, 2014

2014-08-06 18:00:00
Ticker Giełda ISIC Kraj Miasto
SBMO XAMS Netherlands Schiedam






SBM OFFSHORE HALF-YEAR RESULTS 2014

Revenue up 6%; Outlook confirmed

August 6, 2014



SBM Offshore's execution of projects on hand in the first six months of the year

led to better than expected revenue growth.  The Company is making progress

towards resolving its compliance issue, as evidenced by the US$240 million

provision, secured US$1.45 billion of financing for Cidade de Maricá and signed

the Operations & Maintenance contract for FPSO Turritella.  Directional(1)

Backlog stands at US$21.5 billion.  SBM Offshore continued to achieve over 99%

uptime across the fleet.  The Company delivered the Kikeh brownfield extension

project on time and on budget while also reaching a settlement of claims arising

from the Deep Panuke project.



Bruno Chabas, CEO of SBM Offshore commented:



"In financial and operational terms, the first half of 2014 has been a period of

solid performance.  We have also made progress towards the closure of our final

legacy issue with a provision against a potential settlement.



The period also presented a significant challenge: our withdrawal from two

current tenders in Brazil pending the outcome of the compliance investigation.

Nevertheless, the Company has built a decades-long track record of close

cooperation with Petrobras.  We believe this will provide a basis to resume a

successful working relationship, once the investigation is properly completed.



Tendering activity remains high, and there is industry consensus on a

substantial number of new FPSOs and turrets due for award in the coming years.

Thus, while we remain cautious on the timing of individual awards in the short

term, we have a sound basis for confidence in our medium and long term

prospects."



Financial Highlights







* Directional(1) revenue ahead of expectations at US$1,729 million

* Underlying Directional(1) EBIT decreased by 37% to US$184 million, compared

to a strong 1H 2013

* Directional(1) Backlog stands at US$21.5 billion, including the O&M contract

for the Shell FPSO Turritella

* Cash at the end of the period stood at US$154 million; undrawn credit

facilities of US$939 million

* Net debt at the end of June stood at US$4,302 million, under new IFRS

reporting standards

* Project financing secured for Cidade de Maricá totaling US$1.45 billion at

an average cost of debt of 5.3% with 12 and 14 year maturity tranches

* US$240 million provision related to the compliance investigation







+-----------------------------------+ +----------------------------------------+

     | Directional(1) | | IFRS |

+-----------------------------------+ +----------------------------------------+



+------------+ +-----------------------------------+ +----------------------------------------+

|in US$ | | 1H 2014  1H 2013* % | | 1H 2014 1H 2013* % |

 |million | | Change| | Change|

+------------+ +-----------------------------------+ +----------------------------------------+

|Revenue | |                     6%| |           2,797           2,164 29%|

 | | | 1,729 1,634 | | |

| | | | | |

|Turnkey | |                     5%| |          2,275           1,744 30%|

 | | | 1,208 1,146 | | |

| | | | | |

|Lease and | |                           7%| |                           25%|

 |Operate | | 521 488 | | 522 419 |

| | | | | |

|EBIT | |                   NM| |             201                NM|

 | | | (41)            (8) | | 74 |

| | | | | |

|Underlying | |                           -37%| |             426              374 14%|

 |EBIT | | 184 292 | | |

| | | | | |

|Profit | | | | |

|(Loss) | |                            | |                |

|attributable| | (98) (44) NM| |             137 12 NM|

|to | | | | |

 |Shareholders| | | | |

| | | | | |

|Underlying | | | | |

|Profit | | | | |

|(Loss) | |                           -49%| |             362              307 18%|

|attributable| | 127 252 | | |

|to | | | | |

 |Shareholders| | | | |

+------------+ +-----------------------------------+ +----------------------------------------+



+------------+ +-----------------------------------+ +----------------+-----------------------+

|in US$ | | 30. Jun 14 31-Dec-13* % | | 30. Jun 14 | 31-Dec-13* % |

 |billion | | Change| | | Change|

+------------+ +-----------------------------------+ +----------------+-----------------------+

|Backlog | |                         -3%| |                                  NM|

 | | | 21.5 22.2 | | -  -  |

| | | | | |

|Net Debt | |                            25%| |                             27%|

 | | | 3.0 2.4 | | 4.3 3.4 |

+------------+ +-----------------------------------+ +----------------------------------------+

*Restated

for

comparison

  purposes







Guidance



Management is confidently reiterating 2014 Directional(1) revenue guidance of

US$3.3 billion, of which US$2.3 billion is expected in the Turnkey segment and

US$1.0 billion in the Lease & Operate segment.



First Half 2014 Results



Project Review



FPSO N'Goma (Angola)



The construction, refurbishment, and module work at Keppel Singapore was

completed in early May 2014.  A successful lifting campaign at the Paenal yard

in Port Amboim, Angola, was completed in July and the vessel set sail to the

offshore site where mooring has been completed and hook-up operations and

acceptance testing is to follow.  The scheduled start of production is in 3Q14

at a design capacity of 100,000 bpd.



FPSO Cidade de Ilhabela (Brazil)



Following completion of refurbishment and conversion at the Chinese yard at the

end of 2013, construction continued for the finance leased vessel during the

first half of 2014 in Brazil where the process modules were successfully

installed at the Brasa yard.  The FPSO includes topside facilities able to

process 150,000 bpd of production fluids for export, including the substantial

volumes of associated gas from the pre-salt field.  Start-up of the facility is

expected in the second half of 2014.



FPSO Cidade de Maricá and Cidade de Saquarema (Brazil)



Construction is ongoing for the two finance leased vessels.  Refurbishment and

conversion work progressed during the first half of 2014 at a Chinese yard.  The

charter contract for both vessels includes an initial period of 20 years with

extension options.  The two double-hull sister vessels will be moored in

approximately 2,300 meters of water depth and possess a storage capacity of 1.6

million barrels each.  The topside facilities of each FPSO weigh approximately

22,000 tons, will be able to produce 150,000 bpd of well fluids and have

associated gas treatment capacity of 6,000,000 Sm3/d.  The water injection

capacity of the FPSOs will be 200,000 bpd each.



FPSO Turritella (US Gulf of Mexico)



Construction on the FPSO previously known as Stones continued for the finance

leased vessel in the first half of the year, with refurbishment and conversion

work continuing at Keppel Singapore.  The charter contract includes an initial

period of 10 years with extension options up to a total of 20 additional years.

In May 2014, the Operations & Maintenance contract was signed with Shell

Offshore Inc.  When installed at almost 3 kilometers of water depth, the FPSO

Turritella will be the deepest offshore production facility of any type in the

world.  The vessel is a typical Generation 2 design, with a disconnectable

internal turret and processing facility capacity of 60,000 barrels of oil per

day (bpd) and 15 mmscfd of gas treatment and export.



FPSO Marlim Sul (Brazil)



An extension of six months through the end of 2014 has been agreed to with

Petrobras. Negotiations for further extension opportunities beyond 2014

continue.



FPSO Kikeh (Malaysia)



SBM Offshore and its joint venture partner MISC Bhd achieved a key milestone

with the start-up of the Siakap North-Petai (SNP) field through a tie-back to

the Kikeh FPSO.



The SNP field, a unitized development operated by Murphy Sabah Oil Co.,Ltd

(Murphy), is located offshore Malaysia in water depth of approximately 1,300

metres.  Murphy announced first oil production from the SNP field on February

27, 2014.



The event is an important milestone for a project that commenced in January

2012 at SBM Offshore's Kuala Lumpur office and involved the fabrication and

offshore lifting of four new modules and approximately 340,000 man-hours of

offshore construction and commissioning work done on a live FPSO.



Turret Mooring Systems



The three large, complex turrets for Prelude FLNG, Quad 204 and Ichthys are

progressing, in close consultation with the respective clients, on schedule

according to their respective stages of project completion.  Fabrication work on

Prelude FLNG is underway in Dubai, while the integration of the Quad 204 Turret

with the vessel continues in South Korea, with expected delivery in the second

half of 2014.  Engineering and procurement for the Ichthys turret has been

completed while construction continues to progress at the yard in Singapore,

with expected delivery in the first half of 2015.







Main Projects Overview











Main Projects Overview:



Project Contract SBM Capacity, Size POC Expected Notes

Share Delivery

--------------------------------------------------------------------------------



+--------------+----------+--------+--------------+---+--------+---------------+

|N'Goma, FPSO | | | | | |Construction, |

| | | | | | |refurbishment |

| | | | | | |and module work|

| | | | | | |at Keppel |

| | | | | | |shipyard in |

| | | | | | |Singapore |

| | | | | | |completed in |

| | | | | | |early May. |

| | | | | | |Lifting of |

| | | | | | |remaining |

| | | | | | |modules at the |

| | 12 year | | | | |Paenal yard in |

| | finance | 50% | 100,000 bpd | | 2014 |Angola |

| | lease | | | | |completed, and |

| | | | | | |vessel has set |

| | | | | | |sail to the |

| | | | | | |offshore site. |

| | | | | | |Mooring |

| | | | | | |completed, |

| | | | | | |hook-up |

| | | | | | |operations and |

| | | | | | |acceptance |

| | | | | | |testing to |

| | | | | | |follow with |

| | | | | | |delivery |

| | | | | | |expected 3Q14. |

+--------------+----------+--------+--------------+---+--------+---------------+

|Ilhabela, FPSO| | | | | |Integration and|

| | | | | | |commissioning |

| | | | | | |of the process |

| | 20 year | | | | |modules at our |

| | finance | 62.25% | 150,000 bpd | | 2014 |Brasa yard in |

| | lease | | | | |Brazil |

| | | | | | |progressing |

| | | | | | |well. Delivery |

| | | | | | |expected 2H14. |

+--------------+----------+--------+--------------+---+--------+---------------+

|Quad 204, | | | | | |Integration |

|Turret | | | | | |with the vessel|

| | Turnkey | | 320,000 bpd, | | |in Korea is |

| | sale | 100% | 28 risers | | 2014 |ongoing. |

| | | | | | |Delivery |

| | | | | | |expected in |

| | | | | | |2H14. |

+--------------+----------+--------+--------------+---+--------+---------------+

|Prelude, | | | | | |Fabrication in |

|Turret | | | | | |Dubai nearing |

| | Turnkey | | 95m height, | | |completion. |

| | sale | 100% | 11,000 tons | | 2015 |Integration |

| | | | | | |with the vessel|

| | | | | | |to commence |

| | | | | | |1Q15 in Korea. |

+--------------+----------+--------+--------------+---+--------+---------------+

|Ichthys, | | | | | |Engineering and|

|Turret | | | | | |procurement |

| | Turnkey | 100% | 60m height, | | 2015 |completed. |

| | sale | | 7,000 tons | | |Construction |

| | | | | | |progressing in |

| | | | | | |Singapore. |

+--------------+----------+--------+--------------+---+--------+---------------+

|Maricá, FPSO | | | | | |Vessel in the |

| | 20 year | | | | |shipyard in |

| | finance | 56% | 150,000 bpd | | 2015 |China, |

| | lease | | | | |refurbishment |

| | | | | | |and conversion |

| | | | | | |progressing. |

+--------------+----------+--------+--------------+---+--------+---------------+

|Saquarema, | | | | | |Vessel in the |

|FPSO | 20 year | | | | |shipyard in |

| | finance | 56% | 150,000 bpd | | 2016 |China, |

| | lease | | | | |refurbishment |

| | | | | | |and conversion |

| | | | | | |progressing. |

+--------------+----------+--------+--------------+---+--------+---------------+

|Turritella, | | | | | |Refurbishment |

|FPSO | 10 year | | 60,000 bpd, | | |and conversion |

| | finance | 100% |disconnectable| | 2016 |progressing at |

| | lease | | | | |Keppel shipyard|

| | | | | | |in Singapore. |

+--------------+----------+--------+--------------+---+--------+---------------+





Legend, Percentage of Completion (POC)

------------------------------------------------------------------------

< 25%         25% < 50%    50% < 75%    > 75%    100%







HSSE



During the period, SBM Offshore deeply regrets to have to report two fatalities

of contractor staff at the relevant yard on construction projects in Singapore.

Root cause analysis has been carried out and appropriate measures have been put

into effect at contractor facilities.



These fatalities are all the more regrettable, since over the course of the

first six months of 2014 the Company achieved an improved safety performance in

a range of its business activities, with a Total Recordable Injury Frequency

Rate (TRIFR) of 0.26 for the first half of 2014 compared to 0.40 at the end of

2013.  The Lost Time Injury Frequency Rate (LTIFR) also improved to 0.06 in the

first half of 2014 from 0.15 at the end of 2013.



Compliance



As previously disclosed in various press releases, SBM Offshore voluntarily

reported in April 2012 an internal investigation into potentially improper sales

practices involving third parties to the relevant authorities, and has since

been in dialogue with these authorities.



SBM Offshore is discussing a potential settlement of the issues arising from the

investigation.  While these discussions are ongoing, it is sufficiently clear

that a resolution of the issues will have a financial component, and

consequently SBM Offshore has recorded a non-recurring charge of US$240 million

in the first half of 2014, reflecting the information currently available to the

Company.



Until the matter is concluded, SBM Offshore cannot provide further details

regarding a possible resolution of the issues arising from the investigation,

and no assurance can be given that a settlement will actually be reached.  As

always, the Company will inform the market as soon as further information can be

provided.



Overheads & Operating Costs



As announced with the Full Year 2013 results on February 6, 2014, SBM Offshore

has embarked on a two year programme focused on business improvements, increased

fleet maintenance and Research and Development.



The business improvement project Odyssey 24 is aiming to achieve several

objectives.  It will optimize and consolidate the ways of working of a Company

that has quickly grown from a mid-sized centrally managed business to a multi-

national, organized in accountable business units.  It will improve project

management and controls of projects that have grown in size from around US$500

million a few years ago, to close to US$2 billion today.  It aims to reduce

project costs by at least 5% for each project through improved project, supply

chain and materials management, improving both profitability and competitive

edge.  These financial benefits will accrue to the bottom line increasingly over

the next few years.  Increased investments in R&D will ensure SBM Offshore stays

at the forefront of floating solutions technology, such as complex large turret

and swivel systems, thereby opening up new deepwater frontiers for the

industry.  Finally, a focused increased in offshore maintenance will ensure that

the Company is better prepared for long duration lease contracts and contract

extensions.



The Company expects incremental annual costs equivalent to 2.5%-3% of

Directional1 revenue in 2014 and 2015. These incremental costs have an impact on

the 1H'14 Gross Margin and Overheads, as the investments precede the expected

benefits.



Orders



Directional(1) order intake during the first half of 2014 totalled US$1,034

million, driven primarily by the finalization of the FPSO Turritella Operations

& Maintenance contract with Shell and the payment of agreed upon variation

orders by clients.



Post-Period Events



The Company secured project financing for FPSO Cidade de Maricá totalling

US$1.45 billion from a consortium of international banks at a weighted average

cost of debt of 5.3%.  The financing consists of two tranches, $1.0 billion with

a 12 year post-completion maturity and $450 million with 14 year maturity.



Divestment Update



Marketing of the newbuild DSCV SBM Installer continues.  The FPSO Falcon and

VLCC Alba remain held for sale and the disposal of the last of three Monaco

office buildings is nearing completion.



Outlook and Guidance 2014



Management is confidently reiterating 2014 Directional(1) revenue guidance of

US$3.3 billion, of which US$2.3 billion is expected in the Turnkey segment and

US$1.0 billion in the Lease & Operate segment.



In terms of new FPSOs, SBM Offshore anticipates total industry-wide awards in

double digits over the next few years, and the Company is well-positioned to

take an appropriate share of the projects which it is targeting.  On the timing

of individual awards, SBM Offshore is cautious, noting the trend in recent years

for tendering processes to lengthen.  Nevertheless, it is clear that a

substantial body of FPSOs must be commissioned over the next two years for oil &

gas companies to maintain production levels.



FINANCIAL REVIEW



IFRS 10, 11 & 12



New consolidation standards for joint ventures (JVs) have been introduced as of

January 1, 2014 ending proportional consolidation of JVs for SBM Offshore.  As

disclosed in its 2013 Annual Report, the Company is now required to account for

its fully controlled JVs on a fully consolidated basis (mostly impacting all

Brazilian FPSOs) and apply equity accounting to the Company's jointly controlled

JVs (mostly Angolan FPSOs).  These new standards (IFRS 10, 11 & 12) apply to the

income statement, statement of financial position and cash flow statement.



On balance, this implementation has a limited impact on SBM Offshore's IFRS

revenue as the additionally reported partner share in the fully consolidated

ventures is offset by the exclusion of revenue in the equity accounted ventures

and almost nil to net income attributable to shareholders.  However, the

Company's reported total asset value at year-end 2013 has increased

significantly by approximately US$1.6 billion, as the now fully consolidated

Brazilian assets are younger and represent a larger part of the balance sheet.

A similar effect is visible at the gross debt level, increasing from US$2.9

billion to US$3.6 billion.  The Company's 2013 pro-forma financial statements

were disclosed in SBM Offshore's Q1 trading update.



As this change of consolidation rules under IFRS further complicates the

understanding of the Company's performance and as previously announced,

Directional(1) reporting will be based on proportional consolidation for all

Lease & Operate contracts.  Compared to previous Directional(1) reporting the

change is limited to FPSOs Aseng (60% owned) and Capixaba (80% owned) previously

fully consolidated and now proportionally consolidated as all other Lease &

Operate contracts.  This change to Directional(1) reporting led to a limited

negative impact of US$35 million and US$5 million in first half 2013

Directional? Revenue and EBIT respectively (no impact on Directional? net income

attributable to shareholders) and restated figures for first half 2013.



Effective January 1, 2014 SBM Offshore's Directional? reporting principles are

as follows:







* Directional? reporting represents an additional non-GAAP disclosure to IFRS

reporting

* Directional? reporting assumes all lease contracts are classified as

operating leases

* Directional? reporting assumes all JVs related to lease contracts are

consolidated on a proportional basis

* Directional? reporting is limited to restating the consolidated income

statement however no restatement of the statement of financial position is

made











+--------------+--------------+ +--------------------------+------+

| New |Directional(1)| | New IFRS | IFRS |

     |Directional(1)| | | | |

+--------------+--------------+ +--------------------------+------+



+------------+ +-----------------------------+ +---------------------------------+

|in US$ | | 2013 2013 | | 2013 2013 |

 |million | | | | |

+------------+ +-----------------------------+ +---------------------------------+

 |Revenue | | 3,373 3,445| |                     4,584 4,803|

| | | | | |

 |EBIT | |  63  98| |                       188  293|

| | | | | |

|Profit | | | | |

|(Loss) | | | | |

|attributable| | | | |

|to | | | | |

 |Shareholders| | 58 58| |                       114  111|

+------------+ +-----------------------------+ +---------------------------------+



+------------+ +-----------------------------+ +---------------------------------+

|in US$ | | 31-Dec-13 31-Dec-13 | | 31-Dec-13 31- |

 |million | | | | Dec-13|

+------------+ +-----------------------------+ +---------------------------------+

|Backlog | | | |                           |

 | | | 22,198 23,025| | -    -|

| | | | | |

 |Gross Debt | |  -  -| |                     3,608  2,890|

| | | | | |

 |Total Assets| |  -  -| |                     8,692 7,118|

| | | | | |

 |Total Equity| | -   -| |                     2,887  2,135|

+------------+ +-----------------------------+ +---------------------------------+





Directional(1) Performance



In 2013, SBM Offshore decided to extend its reporting with non-IFRS disclosures

showing revenue and results ("Directional(1)") more in line with operating cash

flows to increase transparency and understanding of the Company's performance

and provide unaudited disclosures of Backlog and Income Statement based on

Directional(1) principles.



For more information, a copy of the Directional1 presentation made to the

financial community in June 2013 can be found in the Investor Relations section

of the Company website.





----------------------- ------------------- ----------------- --------------

  1H 2014   1H 2014   1H 2013

Variance

in US$ million  Directional Directional

    ((1))   pro-forma ((2))

----------------------- ------------------- ----------------- --------------





  Total Revenue   1,729    1,634   6%



  Lease and Operate



  Third party revenue   521   488   7%



  Gross Margin   152   (153)   NM



Operating

  profit/(loss) (EBIT)   139    (164)   NM



Underlying EBIT

  Margin   23.8%   27.9%   -410bps



Depreciation, amort.

  and impairment   129   140   NM



  EBITDA   268     (24)   NM







  Turnkey



  Third party revenue   1,208   1,146   5%



  Gross Margin   199   245   -19%



Operating

  profit/(loss) (EBIT)   107   177   -40%



Underlying EBIT

  Margin   8.9%   15.5%   -660bps



Depreciation, amort.

  and impairment   7     7   0%



  EBITDA   114    184   -38%







  Other



Other operating

  income/(expense)   (240)   -   NM



Selling,

administrative,

research &

  development expenses    (47)     (22)   119%



Operating

  profit/(loss) (EBIT)   (288)   (22)   NM





----------------------- ------------------------------------- --------------

Total Operating

  profit/(loss) (EBIT)    (41)    (8)   NM

----------------------- ------------------------------------- --------------

  Total EBITDA   98    139   -29%

----------------------- ------------------- ----------------- --------------

  Net financing costs    (47)   (42)   11%



Share of profit of

equity-accounted

  investees   (16)    (6)   155%



  Income tax expense    6   12   -49%

+--------------------------------------------------------------------------+

 |Profit/(Loss)    (98)    (44)   121%|

+--------------------------------------------------------------------------+

((1) )Directional view is a non-IFRS disclosure, which treats all leases

as operating leases and consolidates the vessel joint ventures

  proportionally



((2) )Restated for

all vessels

proportionnally

  consolidated







Directional(1) revenue for the first half of 2014 was up by 6% year-over-year to

US$1,729 million versus US$1,634 million in the first half of 2013.

Directional(1) revenue by segment was as follows:



* Directional(1) Turnkey revenue increased by 5% from the year-ago period

reflecting the strong activity on the construction of FPSOs Cidade de Maricá

and Saquarema during the first half of 2014.

* Directional(1) Lease and Operate revenue increased by 7% versus the first

half of 2013 mainly due to FPSO Cidade de Paraty and the Deep Panuke

platform commencing production in June 2013 and August 2013, respectively.



Directional(1) Earnings Before Interest and Taxes (EBIT) for the first half of

2014 represented a loss of US$41 million compared with a loss of US$8 million in

the year-ago period.  Underlying Directional(1) EBIT excluding the US$270

million charge recorded on Yme and the impairment variances on Deep Panuke along

with the US$240 million provision in 2014 for the settlement of the

investigation of improper sales practices, decreased by 37% to US$184 million

compared to the first half of 2013. This was primarily attributable to:



* Directional(1) Turnkey EBIT decreased by 40% due to the exceptional

performance of various projects during the last year period (OSX-2, Fram,

Skarv and construction of Cidade de Paraty).  Underlying Directional(1)

Turnkey EBIT Margin in the first half of 2014 came in at 8.9% compared to

9.6% in the second half of 2013.

* Underlying Directional(1) Lease and Operate EBIT remained stable compared

with the year-ago period but includes the impact of increased costs

associated with the start-up of the two-year focused fleet maintenance

programme.  Underlying Directional(1) Lease & Operate EBIT Margin remained

stable at 23.8% in the first half of 2014 compared to the second half of

2013.



Directional(1) Overheads expenses reported in the Other segment increased to

US$47 million in the first half of 2014 from US$22 million in the year-ago

period.  The strong year-on-year increase was mainly due to the launch of our

two year transformation programme, named Odyssey 24, aiming at laying the

foundation to deliver consistent and outstanding performance.  In general,

Overheads expenses increased also due to additional efforts to maintain our

leading technological position, as well as one-off items such as the expenses in

relation to our internal investigation and the absence of depreciation during

the past period for offices held for sale.



For the first half of 2014, Directional(1) EBITDA decreased to US$98 million.

Adjusted for non-recurring events, underlying Directional(1) EBITDA decreased by

19% to US$338 million due to the positive effects of the projects closed-out in

2013 impacting the Turnkey segment.



Directional(1) net financing costs totalled US$47 million in the first half of

2014, up from US$42 million in the year-ago period.  The increase was primarily

due to the interest costs related to the FPSO Cidade de Paraty project loan as

the unit commenced production in June 2013 and mitigated by the decrease of the

overall cost of debt during the period.



SBM Offshore recorded a Directional(1) net loss of US$98 million for the first

half of 2014 or US$0.47 per share, compared with a US$44 million loss or US$0.22

per share for the first half of 2013.  Adjusted for the US$270 million charge

recorded on Yme and the impairment variances on Deep Panuke along with the

US$240 million provision in 2014 for the settlement of the investigation of

potentially improper sales practices, underlying Directional(1) net income

decreased by 49% year-on-year to US$127 million or US$0.61 per share, compared

to US$252 million or US$1.26 in the first half of 2013 for the reasons stated

above.



IFRS Performance



IFRS revenue for the first half of 2014 amounted to US$2,797 million, an

increase of 29% compared to US$2,164 million in the year-ago period, mainly as a

consequence of significant investments in finance lease contracts.



IFRS EBIT for the first half of 2014 increased significantly from US$74 million

to US$201 million despite the US$240 million provision in 2014 for the

settlement of the investigation of potentially improper sales practices.



IFRS net income attributable to shareholders came in at US$137 million compared

to US$12 million a year ago.



Directional(1) Backlog



Directional(1) Backlog as of June 30, 2014 totalled US$21.5 billion of which

approximately US$1.7 billion is expected to be executed over the remainder of

2014.  The Backlog at the end of June 2014 includes the Shell Turritella FPSO

Operations & Maintenance contract signed in May 2014.



Directional(1) Backlog at the end of June 2014 is as follow:





------------------ ----------------- ----------------- -------

  (in billion US$)   Turnkey Systems   Lease & Operate   Total

------------------ ----------------- ----------------- -------





  2H14   1.2   0.6   1.7



  2015    0.9   1.0   1.9



  2016   0.1   1.4   1.5



  Beyond 2016     0.0   16.4   16.4





+------------------------------------------------------------+

 |Total Backlog   2.1   19.4   21.5|

+------------------------------------------------------------+







Statement of Financial Position



The Company has adopted IFRS 10, 11 and 12 in 2014, which had significant

consequences for the reported financial statements.



Under new IFRS 10, 11 & 12 consolidation standards for joint ventures (JVs),

reported net debt as of December 31, 2013 was restated from US$2,691 million

(previous IFRS) to US$3,400 million (new IFRS).  As of June 30, 2014 net debt

under new IFRS standards increased to US$4,302 million reflecting significant

investments in the ongoing Lease and Operate projects under construction for

Brazil and Turritella.  Cash and cash equivalent balances came in at US$154

million and committed, undrawn, long-term bank facilities stood at US$939

million.  The average cost of debt is 4.2% compared to 5.3% at the end of 2013

driven by lower cost of debt on recent bridge loans and projects loans, such as

Cidade de Paraty.



Total equity as of June 30, 2014 remained stable at US$2,917 million compared to

December 31, 2013.  The Company's net debt to total equity increased from 118%

at year-end 2013 to 147% at the end of the first half of 2014.  This was

primarily due to the strong growth of project debt funding finance lease

projects under construction for Brazil as well as the Deep Panuke bridge loan

set up in May 2014.



As a result of the significant impacts on the Company's consolidated statement

of financial position relating to the new IFRS 10 and 11 standards instituted in

January 2014, the key financial covenants applying to current bank loans had to

be recalculated with the view to place the Company and lenders in the same

position as they would have been if the change of IFRS standards had not

occurred.  Restated for the implementation of IFRS 10 and 11, the Company's

solvency ratio stood at 27.5%, firmly within its covenants.



Including cash outflows for finance leases under construction previously

reported as investing activities, cash from operating activities was negative

US$817 million for the period compared to negative US$420 million during the

first half of 2013.  Cash outflows in finance leases under construction for the

first half of 2014 increased significantly to US$1,370 million compared to

US$541 million in the year-ago period taking into consideration the increasing

investments in the fully consolidated FPSOs Cidade de Maricá, Saquarema and

Turritella.  Following the decision to focus the Company's activities

exclusively on FPSOs and FPSO-related products, the disposal process of non-core

assets has continued.  As of the end of June 2014, the total carrying value of

assets presently held for sale amounts to US$177 million.





Further financial information is provided in the consolidated interim financial

statements included in this press release. 2



Analyst Presentation & Conference Call



SBM Offshore has scheduled a webcast of its presentation to the financial

community and a conference call followed by a Q&A session at 19:30 Central

European Summer Time on Wednesday, August 6, 2014.



The presentation will be hosted by Bruno Chabas (CEO), Peter van Rossum (CFO)

and Sietze Hepkema (CGCO). Interested parties are invited to listen to the call

by dialling +31 20 794 8484 in the Netherlands, +44 207 190 1595 in the UK or

+1 480 629 9822 in the US. Conference ID: 4690978. Interested parties may also

listen to the presentation via webcast through a link posted on the Investor

Relations section of the Company's website.



A replay of the conference call will be available on Wednesday, August 6, 2014,

beginning at 22:00 Central European Summer Time until August 20, 2014. The phone

number for the replay is +31 45 799 0028 in the Netherlands and

+44 207 959 6720 in the UK using access code 4690978#. The webcast replay will

also be available on the Company's website.





Corporate Profile



SBM Offshore N.V. is a listed holding company that is headquartered in Schiedam.

It holds direct and indirect interests in other companies that collectively with

SBM Offshore N.V. form the SBM Offshore group ("the Company").



SBM Offshore provides floating production solutions to the offshore energy

industry, over the full product life-cycle. The Company is market leading in

leased floating production systems with multiple units currently in operation,

and has unrivalled operational experience in this field. The Company's main

activities are the design, supply, installation, operation and the life

extension of Floating Production, Storage and Offloading (FPSO) vessels. These

are either owned and operated by SBM Offshore and leased to its clients or

supplied on a turnkey sale basis.



Group companies employ over 10,983 people worldwide, who are spread over five

execution centres, eleven operational shore bases, the joint ventures with

several construction yards and the offshore fleet of vessels. Please visit our

website at www.sbmoffshore.com.



The companies in which SBM Offshore N.V. directly and indirectly owns

investments are separate entities. In this communication "SBM Offshore" is

sometimes used for convenience where references are made to SBM Offshore N.V.

and its subsidiaries in general, or where no useful purpose is served by

identifying the particular company or companies.



The Management Board

Schiedam, August 6, 2014



For further information, please contact:



Investor Relations



Nicolas D. Robert

Head of Investor Relations



Telephone: +377 92 05 18 98



Mobile: +33 (0) 6 40 62 44 79



E-mail: nicolas.robert@sbmoffshore.com



Website: www.sbmoffshore.com







Media Relations

Anne Guerin-Moens

Group Communications Director



Telephone: +377 92 05 30 83



Mobile: +33 (0) 6 80 86 36 91



E-mail: anne.guerin-moens@sbmoffshore.com



Website: www.sbmoffshore.com







Disclaimer



Some of the statements contained in this release that are not historical facts

are statements of future expectations and other forward-looking statements based

on management's current views and assumptions and involve known and unknown

risks and uncertainties that could cause actual results, performance, or events

to differ materially from those in such statements. Such forward-looking

statements are subject to various risks and uncertainties, which may cause

actual results and performance of the Company's business to differ materially

and adversely from the forward-looking statements. Certain such forward-looking

statements can be identified by the use of forward-looking terminology such as

"believes", "may", "will", "should", "would be", "expects" or "anticipates" or

similar expressions, or the negative thereof, or other variations thereof, or

comparable terminology, or by discussions of strategy, plans, or intentions.

Should one or more of these risks or uncertainties materialize, or should

underlying assumptions prove incorrect, actual results may vary materially from

those described in this release as anticipated, believed, or expected. SBM

Offshore NV does not intend, and does not assume any obligation, to update any

industry information or forward-looking statements set forth in this release to

reflect subsequent events or circumstances.



(1 )Directional view is a non-IFRS disclosure, which assumes all lease contracts

are classified as operating leases and all vessel joint ventures are

proportionally consolidated.



(2) Reflects SBM Offshore's proportional share in loan facilities.





SBM Offshore Press Release:

http://hugin.info/130754/R/1846951/644000.pdf







This announcement is distributed by GlobeNewswire on behalf of

GlobeNewswire clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and

other applicable laws; and

(ii) they are solely responsible for the content, accuracy and

originality of the information contained therein.



Source: SBM Offshore N.V. via GlobeNewswire

[HUG#1846951]





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